Tame Treasury Auctions. What's Up With New NOO/2nd Fees?

The week's biggest potential market movers (the 10 and 30yr Treasury auctions) turned out to have almost no impact on the bond market.  In fact, things have been fairly flat since Tuesday.  Instead, the biggest development came in the form of updated delivery requirements on investment properties and 2nd homes.  Pricing will be affected at many lenders--in some cases substantially.  Today's video discusses those changes in greater detail (after taking a few quick minutes to recap market movement and the lock/float outlook).

Econ Data / Events

  • Fed MBS Buying 10am, 1130am, 1pm

  • Jobless Claims 712k vs 725k f'cast, 754k prev

Market Movement Recap
09:21 AM

Treasuries put in a strong showing during the overnight session, especially during European hours.  The ECB announcement helped European bonds, but Treasuries were already bouncing back toward weaker territory.  Lagarde's underwhelming press conference completed the round trip for bonds and we're now back to slightly weaker levels in 10.  MBS at just barely stronger on the day.

11:53 AM

MBS Outperforming as Treasuries sweat the 30yr auction and a chunky corporate bond offering from Verizon.  2.5 UMBS are up about an eighth of a point while 10yr yields are still just barely negative on the day.

01:43 PM

Respectable 30yr bond auction.  Initially a positive reaction, but the gains have faded in the past few minutes.  10yr yields back near 'unchanged' (just slightly higher on the day), and UMBS 2.5 coupons are up only 2 ticks (.06).

03:27 PM

In like a lamb, out like a lamb--at least as far as the 3pm CME close is concerned.  No additional volatility after 30yr auction reaction fizzled out.  Still near unchanged levels in 10s and still slightly stronger in UMBS 2.5s.  Still some late day volatility potential after final pricing of Verizon's big corporate bond offering.